DomSez: Out-sauced

[This post is a syndication of my latest Ruberyvillage DomSez column]

Excuse the pun, because the continuing dispute over Gate Gourmet’s sacking of 670 staff throws up serious questions with the wisdom of outsourcing.
Big strikes are inherently nasty things. They pit boss against worker in a throwback to Victorian employment practices. Picket lines are used to intimidate and bully those going into work. But those striking have often been treated, as in this case, incredibly unfairly in the name of “reform of business practices” which seems to indicate the company was being mismanaged anyway. Clearly, it’s best for all concerned that strikes don’t break out in the first place.

Have pity, then, for British Airways. In a month featuring several aeroplane disasters, and ever-increasing oil prices, the company which BBC News describes as having “no major grievances between workers and the company” has lost up to £40m and suffered yet another reputation hit, all due to a dispute in a completely separate company.

This is where the story gets sticky. Officially, Gate Gourmet is merely a supplier to British Airways, having sold off its in-house catering arm in 1997. But people do not operate in the world of contracting out and corporate restructuring. In ‘real life’ the people who made the food you eat on a BA flight were still making the same food, in the same place, working with the same colleagues. Thus the sympathy strike isn’t surprising. Welcome to the hidden snag of contracting – essential parts of your business are removed from your control forever, but the consequences of something going wrong has an even more serious impact.

In fact, you could see BA’s arrangement as a cynical way of maintaining its brand above the conditions of its workers. Don’t want to be seen as a “nasty” company, with low wages and brutal sackings? Then get someone else to do the dirty work! Then hold your hands up and distance yourself from the actions of your independent supplier. You can make savings by squeezing the contract as hard as you can – because it won’t be your name in the papers.

Clearly, out-sourcing is justified in many arrangements when it would be ludicrous to do it in-house. BA is not going to hire its own electricity department to fix the lights, or pay for a team of BA plumbers. But this is a mile away from the huge task of providing meals to every flight you run, borne out by the fact that BA was Gate Gourmet’s “main customer” in the UK. Maybe, just maybe, in-flight catering is only ever going to be both profitable and of a high enough standard when costed as part of a larger operation – not as the sole drive of an outsourced corporation owned by a Texan venture capitalist firm.

Plane food is one thing, but the trend to blindly outsource has wreaked its worst effects in the health service. Is it any co-incidence that low paid hospital cleaners, working separately from the NHS that used to employ them, were engulfed by the MRSA crisis?

Inevitably, it’s the big names that will take the flak when things go wrong. A victim of the hospital superbug doesn’t care that the cleaning is now the responsibility of a firm they’ve never heard of the same way a passenger who’s had their flight delayed or cancelled will blame the company that took their money: BA. Companies who want to “protect the value of their brands” would be wise to remember this before they outsource the power to do anything about it.